Published: Wednesday, January 9, 2013 at 10:52 p.m.

Last Modified: Wednesday, January 9, 2013 at 10:52 p.m.

For several hours Wednesday, concerns, opposition and some support for the city's biomass contract flowed at City Hall.

As part of the settlement of a lawsuit that sought to have the city's 30-year, $3 billion contract to purchase all the biomass plant's output declared null and void, the City Commission allowed plaintiff and anti-biomass group Gainesville Citizens CARE to hold a workshop to air out issues over the plant and the contract.

The group's primary focus was the changes between the initial proposal that commissioners accepted in 2008 and the contract with a subsidiary of the firm American Renewables that received final approval in May 2009.

Portions of that contract, including the price Gainesville would pay for electricity, were not discussed publicly before the approval of the contract and, at the request of American Renewables, were redacted until the settlement of a prior lawsuit in 2011.

That settlement revealed that the purchase price had risen to $130 per megawatt hour and that a backout clause, which commissioners required when voting to move forward with negotiations in 2008, had been removed.

Jo Beaty, with Gainesville Citizens CARE, said she had tried without success for 15 months to have the City Commission schedule a workshop on the contract before pursuing litigation.

CARE's lawsuit alleged that the negotiations on the contract violated the Sunshine Law because the Gainesville Regional Utilities staff team that handled the talks served in the role of an advisory board and should have held public meetings.

The city disputed the allegations, admitted no wrongdoing but approved the settlement agreement 4-3 in December.

Ray Washington, the attorney who represented the plaintiffs in the prior biomass suit, conducted much of the presentation Wednesday.

The removal of the backout clause, which would have been applicable until the notice of commencement on construction of the plant was issued, has been a recurring issue for biomass opponents since 2011.

Washington questioned the process leading up to its removal from the final contract. He said that, "in a normal situation where you have open government" GRU General Manager Bob Hunzinger would have gone to the City Commission at a public meeting for a debate on its potential removal.

When asked how it was removed, Mayor Craig Lowe said Hunzinger met with commissioners in individual meetings to say that, based on the status of negotiations with American Renewables, the price requested by the company to include the clause in the contract was "not in the best interest of the city."

Lowe said it was then not included in the final contract commissioners approved in May 2009.

When Commissioner Thomas Hawkins was asked the same question about the backout clause, he declined to answer.

In a deposition in the Gainesville Citizens CARE lawsuit, Ed Regan, GRU's former assistant general manager for strategic planning, said the company's request for a $30 million to $32 million fee to terminate the contract was a sticking point in negotiations. Regan said, "we were falling out of our chairs with the big numbers that were coming in."

Regan also testified that inclusion of the clause could make financing more difficult and drive up the prices the city would pay for electricity.

After abandoning plans for a 220-megawatt coal plant over environmental concerns, the city approved a 100-megawatt biomass plant on the premise that 50 megawatts of excess energy, half the plant's output, could be sold to other utilities until 2023.

But the proliferation of the fracking extraction method drove down natural gas prices and carbon cap-and-trade legislation and a requirement for utilities to have renewable energy portfolios have not come to pass.

To date, the city has not been able to successfully negotiate agreements to sell off any of the electricity from the biomass plant. The city is pursuing a series of moves, including a controversial decision to build up a reserve fund through the fuel charge on current customers, to try to limit the rate impact to $10.56 per 1,000 kilowatt-hours of usage in 2014.

Wednesday evening, several speakers criticized city commissioners for not stating that the contract terms were unfavorable to the city.

"Some of you are not humble enough or meek enough to say I made a mistake," said DeJeon Cain, who ran for the City Commission in 2012.

Several foresters who will supply the plant with wood waste fuel spoke in support of the plant, saying it would give a boost to the region's economy and ensure a local fuel source.

Jim Gordon, the president of the firm behind the biomass plant, said the plant would bring local jobs, diversify the utility's fuel sources and lessen the dependence on fossil fuels in the face of climate change.

The plant is now more than 70 percent complete and slated to go online in late 2013.

Currently, the city has filed a claim for arbitration against the American Renewables subsidiary behind the plant, arguing that a late 2011 sale of a 40 percent stake in the biomass plant constituted a control of ownership that should have triggered the city's right of first refusal to make an offer to buy control of the plant.

The City Commission also authorized Hunzinger to attempt to negotiate an alternate resolution, one that could include potential renegotiation of the contract.

As the meeting wound down after 10 p.m., there was a testy exchange between Commissioner Todd Chase and Mayor Lowe.

Chase spoke for more than 10 minutes about the need to work with American Renewables to bring down the city's costs to purchase power, saying it was the single most important issue for the area's economic future. At one point, Chase said the city might do better in wind-generated electricity.

When Hawkins went to speak next and said his comments would be "comparatively brief," Lowe said that if the discussion was about "harnessing wind," they had good material with which to work.

That brought an angry response from Chase.

"You can gavel all you want," he said to Lowe. "To say I'm full of hot air is not the kind of leadership we need."

<p>For several hours Wednesday, concerns, opposition and some support for the city's biomass contract flowed at City Hall.</p><p>As part of the settlement of a lawsuit that sought to have the city's 30-year, $3 billion contract to purchase all the biomass plant's output declared null and void, the City Commission allowed plaintiff and anti-biomass group Gainesville Citizens CARE to hold a workshop to air out issues over the plant and the contract.</p><p>The group's primary focus was the changes between the initial proposal that commissioners accepted in 2008 and the contract with a subsidiary of the firm American Renewables that received final approval in May 2009.</p><p>Portions of that contract, including the price Gainesville would pay for electricity, were not discussed publicly before the approval of the contract and, at the request of American Renewables, were redacted until the settlement of a prior lawsuit in 2011.</p><p>That settlement revealed that the purchase price had risen to $130 per megawatt hour and that a backout clause, which commissioners required when voting to move forward with negotiations in 2008, had been removed.</p><p>Jo Beaty, with Gainesville Citizens CARE, said she had tried without success for 15 months to have the City Commission schedule a workshop on the contract before pursuing litigation.</p><p>CARE's lawsuit alleged that the negotiations on the contract violated the Sunshine Law because the Gainesville Regional Utilities staff team that handled the talks served in the role of an advisory board and should have held public meetings.</p><p>The city disputed the allegations, admitted no wrongdoing but approved the settlement agreement 4-3 in December.</p><p>Ray Washington, the attorney who represented the plaintiffs in the prior biomass suit, conducted much of the presentation Wednesday.</p><p>The removal of the backout clause, which would have been applicable until the notice of commencement on construction of the plant was issued, has been a recurring issue for biomass opponents since 2011.</p><p>Washington questioned the process leading up to its removal from the final contract. He said that, "in a normal situation where you have open government" GRU General Manager Bob Hunzinger would have gone to the City Commission at a public meeting for a debate on its potential removal.</p><p>When asked how it was removed, Mayor Craig Lowe said Hunzinger met with commissioners in individual meetings to say that, based on the status of negotiations with American Renewables, the price requested by the company to include the clause in the contract was "not in the best interest of the city."</p><p>Lowe said it was then not included in the final contract commissioners approved in May 2009.</p><p>When Commissioner Thomas Hawkins was asked the same question about the backout clause, he declined to answer.</p><p>In a deposition in the Gainesville Citizens CARE lawsuit, Ed Regan, GRU's former assistant general manager for strategic planning, said the company's request for a $30 million to $32 million fee to terminate the contract was a sticking point in negotiations. Regan said, "we were falling out of our chairs with the big numbers that were coming in."</p><p>Regan also testified that inclusion of the clause could make financing more difficult and drive up the prices the city would pay for electricity.</p><p>After abandoning plans for a 220-megawatt coal plant over environmental concerns, the city approved a 100-megawatt biomass plant on the premise that 50 megawatts of excess energy, half the plant's output, could be sold to other utilities until 2023.</p><p>But the proliferation of the fracking extraction method drove down natural gas prices and carbon cap-and-trade legislation and a requirement for utilities to have renewable energy portfolios have not come to pass.</p><p>To date, the city has not been able to successfully negotiate agreements to sell off any of the electricity from the biomass plant. The city is pursuing a series of moves, including a controversial decision to build up a reserve fund through the fuel charge on current customers, to try to limit the rate impact to $10.56 per 1,000 kilowatt-hours of usage in 2014.</p><p>Wednesday evening, several speakers criticized city commissioners for not stating that the contract terms were unfavorable to the city.</p><p>"Some of you are not humble enough or meek enough to say I made a mistake," said DeJeon Cain, who ran for the City Commission in 2012.</p><p>Several foresters who will supply the plant with wood waste fuel spoke in support of the plant, saying it would give a boost to the region's economy and ensure a local fuel source.</p><p>Jim Gordon, the president of the firm behind the biomass plant, said the plant would bring local jobs, diversify the utility's fuel sources and lessen the dependence on fossil fuels in the face of climate change.</p><p>The plant is now more than 70 percent complete and slated to go online in late 2013.</p><p>Currently, the city has filed a claim for arbitration against the American Renewables subsidiary behind the plant, arguing that a late 2011 sale of a 40 percent stake in the biomass plant constituted a control of ownership that should have triggered the city's right of first refusal to make an offer to buy control of the plant.</p><p>The City Commission also authorized Hunzinger to attempt to negotiate an alternate resolution, one that could include potential renegotiation of the contract.</p><p>As the meeting wound down after 10 p.m., there was a testy exchange between Commissioner Todd Chase and Mayor Lowe.</p><p>Chase spoke for more than 10 minutes about the need to work with American Renewables to bring down the city's costs to purchase power, saying it was the single most important issue for the area's economic future. At one point, Chase said the city might do better in wind-generated electricity.</p><p>When Hawkins went to speak next and said his comments would be "comparatively brief," Lowe said that if the discussion was about "harnessing wind," they had good material with which to work.</p><p>That brought an angry response from Chase.</p><p>"You can gavel all you want," he said to Lowe. "To say I'm full of hot air is not the kind of leadership we need."</p>